An Appraiser’s View of Mace 391

By Lee Bartholomew

The possibility of the property’s re-emergence as a business park is on my mind. Aside from the obviously bad business practice associated with a change of heart in respect to this property, I wonder at the economics of such a venture. First, as to data collection; have you, or has staff, seen any demand or feasibility studies for larger business parks in the region? Any meaningful absorption forecast?

It would seem as though these questions need some study prior to a sea change for the property. A change to spec development, in my view, reflects a major policy decision about the nature of land use in Davis.

In my work, I see a substantive difference between “Business Park”, or “Industrial Park” and a concept best called “Science Park”. By their user profile, business or industrial parks are often unrelated users (owners or tenants), not necessarily compatible or similar,  who do not need connectivity to operate.

The proposed Metro Air Park adjacent the airport is a perfect example. As posited, that development group would accept any legally permissible use, whether related or unrelated to contiguous users.

A Science park (university research park, science and technology park), on the other hand, use shared resources, including incubators, programs and collaborative services, a shared labor pool, community linkages, etc.

The question of size, or scale, is important, I think. Business park developers like scale because of the economies that are associated with size. If the council wishes to build a business or industrial park, the long term benefits to the city will be marginal. These parks draw low wage users, include lots of
cheap “flex” type product (Buzz Oates can still tilt a single story building for $25 to $40 PSF), are often subject to short duration tenancies and high frictional vacancies, and demand is based entirely on property/market economics.

Better said, such a scaled project in Davis, in my view, would not add much value other than the impact fees and maybe marginally in respect to jobs. Picture the Woodland, Southport, etc. industrial parks. This is NOT in the best interest of Davis, in light of the social cost with the Mace property.

The idea of a science park is far different.

The purpose of science parks is as an incubator designed to capture industry associated with university innovation. Incubator buildings are usually tailored to specialty uses, far different than “flex” realty. Such an incubator would require a partnership with the university, and the results would, I think, better match the aspirations of the citizenry.

Here, I envision something akin to the Progress Park near Gainesville, Fl. This is, all told, a science park, driven by the Sid Martin Biotech Incubator, along with other UF facilities. The total usable space is 142 acres, of which 82 have been absorbed in a 28 year period. This reflects an absorption rate of 2.93 acres per year.

Progress still has 60 available acres, being actively marketed, for specialized opportunities.  It
seems evident to me that in Davis, a site of less than 100 acres, and perhaps in “nodes” as small as 20 or 40 acres would produce great advantage in the development process. The Mace concept is not appropriate, given these data.   

I believe the correct path for tech/incubator/science real estate in Davis should be developed in partnership with the university, and perhaps best directed to a site on existing UC property, or on property contiguous to campus.

Alternatively, nodes with connectivity could be very exciting. The Mace property has significant economic and property related hurdles, not least of which is a requirement for Measure J vote and the establishment of backbone infrastructure.

I think you will not hear the end of it if you violate, twice, the public trust around this property, particularly absent a delineated vision that is supported by great factual evidence.

Do the study, do the sales job, and do it on another parcel that isn’t laden with the agreements that exist on the Mace property. Most important, please do not confuse the benefits of a university related tech center with the far different outcomes associated with a generic flex/business park model.

Lee Bartholomew is the senior appraiser at Bartholomew Associates, Inc. He is a Certified General Real Estate Appraiser. He has a background in finance, and has been appraising all property types since 1985.